Stimulus money gone; highway fund may be next

Jessica Wehrman, The Columbus Dispatch

Monday

Aug 29, 2011 at 12:01 AMAug 29, 2011 at 3:47 AM

WASHINGTON - When it became law in 2009, the massive $787 billion economic stimulus promised to help pull the economy out of its slump by injecting a flood of federal dollars into states struggling to stay afloat. But two years later, many of the projects are winding down, the economy is still struggling and Congress is in yet another standoff - this one over how best to pay for future road projects.

WASHINGTON — When it became law in 2009, the massive $787 billion economic stimulus promised to help pull the economy out of its slump by injecting a flood of federal dollars into states struggling to stay afloat.

But two years later, many of the projects are winding down, the economy is still struggling and Congress is in yet another standoff — this one over how best to pay for future road projects.

“You can plan for the good things, and you can plan for the bad things,” said John Igel, president of Columbus-based construction company George J. Igel and Co. Inc. “But you can’t plan for the ‘I don’t know things.’”

The uncertainty comes as another massive spending bill divides Congress. The authorization to collect and spend the 18.4 cents a gallon in federal gas-tax money on transit and highway projects expires Sept. 30, and leaders in the Republican-controlled House and Democratic-controlled Senate are far apart on a compromise over a surface-transportation funding bill.

If no agreement is reached by then, or the funding isn’t extended, highway and transit projects nationwide could see their funding pulled.

“The eleventh hour is here,” said Matt Jeanneret, a spokesman for the American Road and Transportation Builders Association.

Without a funding extension, Ohio would lose $443 million and an estimated 15,409 jobs, Jeanneret said.

It also would mean delays in current repairs, increased traffic congestion and additional safety issues. On a national level, he said, it could mean furloughs within the Federal Highway Administration, work stoppages and a halt in planning for the future.

David Rose, a spokesman for the Ohio Department of Transportation, said the department is monitoring the proposals being debated in Washington. He said if there is a decrease in federal funding, ODOT could cover projects for a short period of time with state funds.

But Chris Runyan, president of the Ohio Contractors Association, said cuts in highway funding would be devastating, touching every Ohioan and stalling efforts to fix aging highways, deteriorated bridges and bumpy roads.

Infrastructure, he said, “impacts us every day of our lives.”

For all its controversy, the stimulus bill helped change the landscape of America, or at least the roads that crisscross that landscape. All told, the bill poured $27.5 billion into the nation’s transportation system, paving roads, rebuilding bridges and improving interchanges across the country.

Among the most ambitious Ohio projects it supported: $133 million for the Nelsonville bypass and $79.5 million for the Innerbelt Bridge in Cleveland, a bridge on I-90 that crosses the Cuyahoga River.

In Columbus, stimulus projects include $24 million worth of improvements to Parsons and Livingston avenues aimed at improving access to Nationwide Children’s Hospital. Other central Ohio projects include an interchange upgrade at I-270 at Hamilton Road in Gahanna and a project that would connect a commercial shopping area with U.S. 36 in Delaware.

In all, stimulus money paid for $774 million in Ohio Department of Transportation projects and $161.5 million in projects sponsored by localities.

ODOT says 173 of the 220 projects it handled are now complete.

Runyan said the bill stemmed a hemorrhaging in the construction industry, turning an expected 40 to 50 percent reduction in the workforce into a 20 to 25 percent reduction.

But the jobs, he said, were primarily short-term.

“It was a welcomed investment in transportation infrastructure,” he said. “But it wasn’t the panacea originally sold to many people ... there is not anything for these people to move to next.”

Donald Spang of the Miami Valley Regional Planning Commission in Dayton said just five of the 42 local projects funded through the stimulus are still under construction.

He said the program provided a much-needed “shot in the arm” that both created and saved jobs in his region. Before the stimulus bill, he said, “a lot of our members were putting resurfacing projects in mothballs. We weren’t doing it because we didn’t have the money to do it. We were able to fill in a lot of the gaps with stimulus funds.”

But U.S. Rep. Bob Gibbs, R-Lakeville, said too little of the stimulus was spent on roads and bridges. According to the American Road and Transportation Builders Association, only 3.5 percent of the stimulus was spent on roads and bridges. Gibbs said most of the jobs created by the stimulus were short-term.

“In general, we’ve got a mountain of additional debt, and I don’t think we got much out of it,” he said. “Unemployment is still 9 percent or higher. I don’t think it worked.”

Congress is currently in recess and will have 11 legislative days in September before the Sept. 30 deadline, according to Jeanneret.

The federal government traditionally spends about $41 billion a year on the nation’s highways — only about one-fourth of the roughly $160 billion total spent on highways, according to the Congressional Budget Office. Federal highway dollars traditionally come from the federal gas tax and other revenue directed to the Highway Trust Fund, but Congress has traditionally spent more on highways than the revenue in the fund, borrowing from general revenue to pay for projects.

House Transportation Committee Chairman John Mica, R-Fla., says that has to change. He and other House Republicans are pushing a six-year, $230 billion bill that would reduce transportation funding by about a third, relying only on funds generated by the gas tax. Gibbs, a member of the committee, said the House proposal better reflects the fiscal reality.

“The pie is smaller,” he said, saying that it’s likely states will be given block grants and asked to make the decisions about what to fund. “My advice would be to prioritize.”

The Senate alternative, meanwhile, would authorize $109 billion over two years and maintain existing spending levels. Sen. Barbara Boxer, chair of the Senate Environment and Public Works Committee, said the cuts proposed in the House plan would “ throw hundreds of thousands of people out of work in a sector that has suffered enormously during the recession.” She said the investment has “not kept up with the needs.”

Spang called the looming battle over the transportation reauthorization bill “scary.”

“I’ve been in this area doing this for 34 years,” he said. “And I’ve never experienced going this long without a reauthorization of the surface-transportation act. It just doesn’t look like anyone’s willing to bite the bullet and reauthorize it.”

jwehrman@dispatch.com

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